YIKES! I Never Thought of That!

I found a fantastic article via my absolute favorite source for post-bubble news/housing crash news: http://patrick.net/housing/crash.html. The article that I followed from Patrick's website is: The Housing Market's Double Bubble: The Big One Still Has Yet To Pop.

It's a very informative article that explains the housing mess clearly. It brings up something I hadn't considered before though and the thought of it was frightening! All those folks who had moved out to the boonies in order to find an affordable home, can no longer afford the gas to commute back and forth from work to home and vice verse. They can't even afford the homes that they are living in and the loss of equity and the terrible location makes it impossible for them to sell their homes. So what are these folks going to do? They're going to try to move closer to their jobs, to places like Burbank! Yikes!

What does that mean for us? I've been thinking about this a lot, after the horror of it settled in my mind. Clearly this means that there will be more competition for rentals, as most are going to walk away from their homes, so they will be unable to buy another home, they'll be renters, just like me. And what does competition for rentals mean for me? Higher rental prices caused by competition and the lack of rentals! Sure there are all those foreclosed houses that we could rent, but have you seen the prices they want for a house rental? You'll be lucky to touch one at $2000 a month, but most are about $2500 to $2900, representing the mortgage payment for an overpriced home, that the prior owner couldn't afford in the first place. So the problem is that housing rentals won't be an option for many of us. Instead we'll be stuck in apartments and duplexes, etc.

I wonder if an influx of outside folks has been driving the cost of renting in Burbank up in the first place? I mean I understood that present Burbank residents have been stuck in their current rentals, because they couldn't afford the new rental prices in the neighborhood, but I hadn't considered all the people who were walking away from their homes and moving into my neighborhood because of it. I HAD thought about people being forced into rentals because they lost their homes, but I HADN'T thought about people coming from outskirt areas like Santa Clarita, Lancaster and Palmdale to live in my neighborhood because they couldn't afford the gas.

When does this nightmare end?

And what about the stagnant price of homes. Sure they are dropping, but not as much as you would think considering the buyer pool has pretty much dryed up. Even given this, people still think that if they hold on to their homes, eventually us folks will be able to afford them at bubble prices, but we're talking years here, right? Many of us won't want to wait that long. We'll have moved out of the area long before that. Still, people aren't dropping their prices. I've seen decreases in my neighborhood, but nothing substantial. Some homes in Burbank increased over 150% in only 3-4 years! That's crazy! The prices need to come down. Anyway, I can't understand what banks and sellers are thinking.

If they know we don't have the incomes or the crazy loans to afford to purchase their homes, then who do they think is going to buy them?

It seems so simple to me. 1+1 doesn't equal 2.

The whole housing mess scenario seems almost surreal, completely unbelievable. It's like a crazy nightmare and the things you think would never happen are happening, like the screaming high gas prices, that serve only to add salt to our wounds, further bringing our nation down. It's almost like there's a crazy puppeteer looming above us, laughing hysterically with fiendish delight, as he lays one whopper after another on us. It's crazy and denial is rampant. No, I'm not getting paranoid, I'm just baffled by all of this and I'm trying to make sense of it all with some level of humor.